Monday, December 21, 2015

Few people know that Amsterdam is the fifth-largest port in Europe, after Rotterdam, Antwerp, Hamburg and Marseille. Nor do many people know that the largest shipbuilding yard of the world, NDSM, once was in the northern part of Amsterdam, the part of the city where I live.

My wife, Aafke Steenhuis, has just published a book, "De magie van het IJ" (The magic of the IJ), about the history of the northern part of Amsterdam that until 1921 was a separate municipality, Nieuwendam.

In the book, richly illustrated with her own paintings, Aafke gives a vivid picture of Amsterdam North, which is becoming increasingly popular, among other things, because of EYE, the film museum located at the northern border of the IJ, the water that divides Amsterdam from its northern part and is pronounced as 'eye'.

In the video below (filmed by me) you see Aafke's visit to Damen Shiprepair Amsterdam, located at the same spot where once the famous NDSM yard was building and repairing ships.

Wednesday, December 9, 2015

When I said yesterday that neoliberal Europe helped the National Front win the elections in France (get more votes than any other party) I included the French Socialist Party which, just like other socialdemocratic parties, has embraced neoliberal policies.

Today I read that French political scientist Fabien Escalona said more or less the same in an interview with the French journal Challenge of 7 December 2015. When asked the question: "Can we say that the Socialist Party (PS) has contributed to the rise of the National Front (FN) in recent years?" he answered:

"The
question may seem paradoxical, as the PS appeared since the 1980s as a
republican and universalist "bulwark" against the FN of father and daughter
Le Pen. However, you can say that the PS indirectly contributed to its progress, as a
government party who is responsible for policies and options rejected by a
growing number of voters.In this regard, however, the PS shares this 'responsibility' with the right of the RPR then UMP and recently renamed "Les Republicains" (LR). In
fact, both the PS and the LR have themselves more or less aligned with a moderate neoliberalism, unable to address mass unemployment and imprisoned by supra-electoral
and supranational constraints of European integration, an integration endorsed by the
two major government parties. For
reasons of law and humanity, immigration flows (around 260,000 people
per year), modest but negatively perceived by FN voters,
have never been drastically reduced either. For
all these reasons and because the FN never took charge of national power,
it can present itself as an attractive alternative for those who fear
(or objectively suffer) an individual and collective declassing.

Tuesday, December 8, 2015

The victory of Marine le Pen's Front National in France is partly the result of the authoritarian, neoliberal policies of the European Union.

As I said in a speech in Paris on 29-30 October 2011, "there is the other
danger that is already manifesting itself, the danger that the current
capitalist system, with its privileges for business and political
elites, creates anger and frustration among people and stimulates xenophobic, nationalistic, anti-establishment, anti-intellectual movements and parties like we already have in the Netherlands."

In my Paris speech I only mentioned the Netherlands, where Marine le Pen's colleague Geert Wilders (Party for Freedom, PVV) was becoming increasingly popular - in recent voting polls h e received the largest number of votes among the Dutch political parties - but I was obviously also thinking of the Front National in France.

Sunday, July 26, 2015

More emotional than analytical I'd like to tell you and myself why I am suddenly silent on this blog. (I did write on my other, less analytical and more emotional blog, in Spanish.)

When a new government in Greece was elected at the end of January of this year I was hopeful that things would change in Greece... and in Europe. I hoped that narrow-minded austerity policies and the lack of democracy in Greece and Europe would begin to end.

I also hoped that the reasonable and politically moderate, social democratic Greek government of Tsipras would receive support from social democratic leaders in other European countries, even though I knew there remained very little in those leaders' thinking and practices that you could call 'social democratic'.

Anyway, I hoped that social democratic European leaders would be inspired to take their social democratic or democratic ideals again seriously and help their brothers and sisters in Greece who were facing the enormous task to (a) change tide in Greece and (b) set an example that better policies would be possible, with a little help of friends in other European countries, be they member or not of the Eurogroup. *)

My hope was idle. Or worse, my hope has turned upside down. Instead of a beginning of change in Greece and Europe, of building a more social and democratic Europe, in the course of the 'negotiations' between Greece and its creditors we have seen the opposite: (social) democratic leaders were once again embracing and defending austerity and authoritarian policies, perhaps even more ferociously (and desperately?) than ever.

Did they do that to kill any hope that another Europe (than the one they shape every day) is possible?

Why would they want to kill that hope? Because they think they have the right vision? Do they really believe in their own, narrow-minded policies? Does François Hollande really believe in a Eurozone government?

Do they want to impose their idea of Europe upon its citizens (to the benefit of the richer part of them)?

And why do European leaders take democracy so little seriously?

*) Did social democratic leaders in other European countries not want that Tsipras engaged in real social democratic policies? And did they not want Tsipras cum suis to set an example? Are they jealous? Are they overly self confident? Are they scared of something, or many things? Should we try to understand their behaviour not only politically but also psychologically?

Saturday, July 18, 2015

Dijsselbloem is a bad economist. He is saying these days, after the Tsipras government has agreed to a package of policies it does not believe in, in numerous interviews in the Dutch media, that the "reforms" his Eurogroup is prescribing to Tsipras will be to the benefit of the Greek people.

Dijsselbloem is like a doctor prescribing a bitter medicine to a patient saying: "This will cure your disease."

But prescribing a medical treatment is different from prescribing political econmic "reforms". In the first you may believe (or not), in the second you should not believe unless you agree with it and history has shown there is reason to believe in it. In the Greek referendum 61 percent of the people have said they did not believe in the Eurogroup's medicine.

Over the past five years we have seen that the Eurogroup medicine did not solve Greece's debt and growth problems. Therefore, Dijsselbloem should have known better.

Moreover, over the past five months his colleague Varoufakis has explained that the Eurogroup medicine would not work and that there is a better medicine. If he had been a good economist, Dijsselbloem would have listened carefully to the arguments of the new Greek government and explained why he did not believe in Varoufakis/Tsipras' plans and preferred to stick to the Eurogroup's Diktat.

In revising this post, I hesitated whether I should call the Eurogroup's medicine a Diktat, but former managing director Dominique Strauss-Kahn has no problem in using that term, I read this Sunday morning in Le Figaro: DSK dénonce le diktat que l'Europe a imposé à la Grèce.

Thursday, July 16, 2015

The failure to solve Greece’s debt
problems over the past five years, notwithstanding and/or due to the intervention
of the Troika, shows the failure of European politicians and technocrats, IMF management
and Greek governments to do a proper job. They were responsible for the problems Tsipras had to
face when he began his job six months ago. The support Tsipras now has received
from the Greek parliament to carry out a deal he himself does not believe in, is
yet another step in an ongoing crisis that seems to have no end. Moreover, the way European politicians
and technocrats have handled and are still handling the Greek debt crisis has
created disunity, cynicism and frustration among many people in Greece and
Europe, rather than the unity and solidarity European authorities pretend
to foster. A new hope for a more
prosperous and social society in Greece and Europe is urgently needed. For that
to happen, we need to create more capable and visionary politicians and technocrats especially
among the leaders. A number of things need to be done:

a better training of economists and
technocrats

a better deal for Greece (that is, a
viable road to solving its debt and growth problems)

a better formula for creating a united,
democratic and social Europe (rather than locking Europe in an austerity euro
straitjacket).

I will try to address these three
issues in next posts. I am aware that there are also politicians and
technocrats doing a good job. But many of the political and technocratic
leaders in Europe have done a bad job in handling the Greek debt problem. Rather than
solving it, they have worsened it.

We have to create hope again in
Europe, especially for the young people who cannot find a (proper) job and those
who live in poverty and have no chances to improve their lives.

Tuesday, July 14, 2015

France's former and current minister of finance agree on debt relief for Greece

You can see it as something positive that, finally, the IMF says that substantial debt relief or debt reduction for Greece is needed and puts it as a condition for IMF engagement in the envisaged agreement between Greece and its creditors.

Sure, it is something the new Greek government of Tsipras has asked for from the beginning, when it started negotiating a deal with its creditors. But I wonder why suddenly now, when the Greek parliament has to decide today (Wednesday) whether it will support the deal struck by Tsipras in which he himself does not believe, the IMF supports one of Tsipras' demands.

Is the sudden move of the IMF meant to convince the Greek parliament that it should support Tsipras' surrender to the creditors? Or, even if the masters of the IMF (Europe and the US) have not thought of the sudden switch to debt relief as a trick to influence the vote in the Greek parliament, does it not serve that purpose?

PS: I just read (Wednesday, 12:15) that France agrees with the IMF debt relief demand. Will that help making the Greek parliament support Tsipras' surrender? Don't forget that the French already helped the Tsipras government prepare the 'compromise' surrender... Does Tsipras hope he will regain policy space once he has the Greek parliament faithfully supporting him in a deal he himself sees as nonsensical, or only making sense to prevent worse?

PS2: I just read (Wednesday, 14:00) in Le Figaro that the central committee of Syriza rejects the deal between Tsipras and the creditors.

This is old news (14 May 2014) but it is still highly relevant today: Schaeuble wanted to kick Greece out of the eurozone already a couple of years ago, namely in July 2012. Who said so? Timothy Geithner, former minister of finance of the United States. Here is the story:

In his new book ‘Stress Test’ just released in the US, Timothy Geithner
has revealed that in 2012 German Finance Minister Wolfgang Schaeuble had
presented him with a plan to kick Greece out of the eurozone. This, he
said, would appease German voters and terrify Europe.

“Germany will stand by you and the Greek people in the struggle to
contend with our shared challenges in Europe and the eurozone." So said
German Chancellor Angela Merkel to interim Prime Minister Lucas
Papademos in November 2011. However around the time the chancellor was
pledging solidarity, her Finance Minister was drawing up plans to kick
Greece out of the eurozone.

That has been revealed by
former US Treasury Secretary Timothy Geithner in his recently released
book ‘Stress Test’. According to Geithner who, together with the rest of
the Obama administration, had watched with alarm as the Europeans
appeared unable to contain the sovereign debt crisis triggered by one of
its smallest members, he met with Schaeuble on the island of Sylt in
the North Sea in July 2012.

Geithner states that during
the meeting Schaeble presented him with a plan to kick Greece out of the
eurozone. This, according to the German Finance Minister, would allow
Germany to provide the financial support necessary to the Eurozone as
the German people would no longer perceive the assistance as a bailout
of the corrupt and profligate Greeks. Furthermore, according to
Schauble’s logic, a Greek exit would scare the rest of Europe enough for
them to commit to providing sufficient financial assistance in order
prevent the system from collapsing.

Schaeuble told his US
counterpart that there were many in Europe who considered this
reasonable and even a desirable strategy. For his part Geithner called
the idea ‘frightening’ writing that he felt that it would create a
crisis of confidence that would be difficult to contain regardless of
how much money the Europeans subsequently pledged to shore up bankrupt
states. He adds that he could not see why the Germans would feel better
about bailing out Spain or Portugal than they would Greece.

In
the book Geithner also once again highlights the disagreement between
the Americans and Europeans in how the debt crisis should be handled at
its outset in 2010. While European lenders remained doggedly committed
to austerity and ‘rhetoric of the Old Testament’ Geithner writes he felt
that imposing aggressive austerity too soon in Greece would be
counterproductive as it would depress the economy and tax revenue,
ultimately increasing the deficit. However the Europeans were not
willing to listen to the advice provided by the Americans whom they
blamed for causing the crisis in the first place.

Every week, The WorldPost asks an expert to shed light on a topic
driving world headlines. This time, we discuss the Greek debt crisis
with Paul De Grauwe, a professor at the London School of Economics.
The
Greek government surprised everybody on Thursday by submitting a
proposal to Greece's international creditors that would implement severe
austerity measures in return for new bailout funds.
Less than a
week ago, Greek Prime Minister Alexis Tsipras' government had urged
voters participating in a national referendum to reject a bailout deal
that included similar austerity measures. Greek voters gave that deal a
decisive "no" in Sunday's vote. Europe then gave the country's leaders
until the end of this week to submit a new proposal or face potential
bankruptcy and the risk of exiting the eurozone.
Under Tsipras' latest plan, Athens would commit to significant
pension cuts and tax hikes in exchange for the possibility of debt
relief and three years of financial aid worth nearly $60 billion, Reuters reports.
The
WorldPost spoke with Paul De Grauwe, the John Paulson chair in European
political economy at the London School of Economics, about the Greek
proposal and what it would mean for the Greek economy in the years
ahead.The proposal submitted by Greek Prime Minister Alexis Tsipras
on Thursday includes such far-reaching austerity measures, and it is
being described as a complete U-turn. What are the biggest concessions
in the new plan?
The Greeks have conceded on the whole
line. One of the big questions and main points of contention was
austerity, and in fact, Sunday's referendum was in large part about the
degree of austerity. The Greek government has now completely surrendered
and accepted the conditions of the creditors. It's remarkable they went
all the way to the referendum opposing austerity and then fall on their
knees. What did the Greeks get in return for making such big concessions?
As far as I can see, nothing. I haven't seen anything about debt alleviation.What do you think has prompted the Greek government to make such a U-turn?
Greeks
have been pushed to the abyss. The European Central Bank has been an
instrument of politicians to starve the Greeks from cash. What happened
is like torture. When you torture somebody long enough, at some point
most people will concede because they can't stand it any longer. I don't
think we can be very proud.

What happened is like torture. ... I don't think we can be very proud.

What
impact might these new proposed measures have on the Greek economy?
Until earlier this week, the Greek government insisted that more
austerity would never be able to put Greece back on its feet.
It's
a continuation of austerity and we've seen that austerity doesn't work.
It will continue to cause low growth, recession and high unemployment,
which leads to misery for so many people. In addition, it won't reduce
the debt burden because output will continue to decline, and therefore
the burden of the debt level will intensify. All this has been tried for
the past five years, and now they just want to continue to do the same
thing. What would have been a better approach?
There's
no point in continuing something that doesn't work, so they would have
had to stop austerity. Also, the debt burden should have been looked at.
My criticism is that the creditor nations should acknowledge that there
had already been a restructuring of Greece's debt and that it has
reduced the debt burden of the Greek government. It's time to provide
liquidity to the Greek government so it can start working again.

This is a union that will not last.

What's a crucial element for HuffPost's readers to understand about the current crisis?
If
you're a member of a monetary union, you face big risks because you're
on your own when you get hit badly by negative economic shocks. In this
monetary union, everyone says, "If you have trouble, don't come to me."
Therefore, this is a union that will not last. This interview has been edited for length and clarity.

But there is obviously a tough task for Greek officials to implement the new austerity programme. They will have to explain to an already suffering Greek population why they continue the same austerity policies of previous Greek governments, even though Greek citizens elected a new anti-austerity government in January 2015 and voted massively NO to austerity (following the advice of the Tsipras government!) in the recent referendum.

"At least once a week, the Greek Ministry of Labor opens its doors to
hear the complaints of the needy. The visitors might represent a factory
that has closed down, a neighborhood succumbing to rampant poverty, or a
group of elderly people whose pensions have been slashed. But
regardless of their plight, they are escorted into the fifth-floor
office of Deputy Minister Rania Antonopoulos, who looks them in the eyes
as they tell their stories and ask for help. It is not unusual during
these meetings, she says, for the guests to break down in tears. “That
is the hardest part of my job,” Antonopoulos told TIME during an
interview at the end of June.
In the coming months, it will probably get a lot harder for her to
manage these complaints if Greece moves ahead with its plan for another
bailout from European creditors. In exchange for about $59 billion in
loans over the next three years, the Greek government pledged
this week that it would raise taxes and carry out painful reforms,
including cuts to Greece’s bloated pension system. On Saturday, European
Finance Ministers met in Brussels to discuss the Greek proposal, and
many of them expressed grave doubts about whether it could be carried
out in practice. “We will definitely not be able to rely on promises,”
Germany’s Wolfgang Schäuble told reporters as he went into the talks.
He is right to question the plan’s feasibility. Unlike the European
technocrats watching from afar, Greek officials will have to deal on a
personal and political level with the plan’s impact on their fellow
citizens, who have already experienced five rough years of austerity and
recession. As those confrontations play out on city squares, at voting
booths and in the offices of public officials across Greece, the
government will face tremendous pressure to amend, delay and otherwise
ease the measures it has promised to enforce.
Antonopoulos’ experience shows just how hard that pressure is to
resist. Although Greece has already cut the average pensions by about a
third in the last five years, pushing nearly half
the country’s pensioners below the official poverty line, it’s not
these cold statistics that drive home the pain of austerity. “It’s when
you look at someone and you see the tears coming out,” said the deputy
minister. “And that person could be my husband who has been laid off, my
brother. That could be me.”

It seems Europeans still have a long road to go, and the Germans, who are key in Europe's money muddle (this is the title of an early and famous book by Robert Triffin that suddenly props up in my mind, Europe and the Money Muddle) do not seem to be the most helpful partners in this challenging and urgent endeavour. Varoufakis wrote yesterday a sharp and alarming article about Schaeuble and his disciples published by The Guardian in which he warns that the Germans want France to obey to German (and Dutch and others) austerity rules: "Germany won't spare Greek pain -- it has an interest in breaking us".

Grexit postponed: How the euro was saved by sinking Greece

Europe has been in a state of economic
crisis for so long that it has started to feel inevitable. It is not.
The European Union went into a recession along with the rest of the
world in 2008; unlike Canada and the United States, much of the
continent has never come out. Two of the EU’s largest countries, Italy
and Spain, have recovered so little that their economies are smaller
than they were seven years ago. The same goes for Portugal.

The unemployment rate for the euro zone,
the 19 countries using the common euro currency, is 11.1 per cent –
higher, after all these years of supposed recovery, than the Canadian
unemployment rate at the bottom of the recession. Italy’s unemployment
rate was just 6.1 per cent in 2007; it has since more than doubled.
Spain’s count, 22.5 per cent, is nearly triple the prerecession figure.

And
leading the parade of the downtrodden, there’s Greece. Nearly 26 per
cent of working-age adults are unemployed. More than half its young
people are jobless. Gross domestic product has declined by a quarter
since 2007. Even if Greece could return to a modest rate of growth, it
wouldn’t regain its 2007 level of output and wealth until some time in
the 2020s. No Canadian recession, not the stagflation of the early 1970s
or the downturn of the early 1990s, even comes close.

None
of this had to be. It is not some divine punishment for economic sins.
The catastrophe is the product of a series of policy choices made by
human beings. Different choices would have led to a different outcomes,
and still could, but instead of figuring out how to get out of
recession, Europe’s political class keeps turning to policies that have
pushed large parts of the continent deeper into it.

Late
last year, Greek voters elected a government that promised to go to war
against the European establishment, and make it change course. Can you
blame them? The status quo is clearly not working for Greece, or for a
lot of other Europeans. It’s why, across the continent, we are seeing
the rise of angry parties on the extreme right and left. The solutions
they propose are often entirely off-base. But the problem they are
responding to is real.

In Greece, that
reality is extreme. The more the country’s government cuts spending and
services, the more an economy in recession contracts further. Greece’s
European partners have repeatedly demanded that Greece return to
economic health by dramatically chopping public spending, and Athens has
largely complied. It has not worked.

The
more Athens cuts, the more its economy is shrunk by the cuts, and the
more Greece’s unsustainable debt burden, now at 177 per cent of GDP,
grows relative to a shrinking economy. This is not some fanciful theory.
It’s just arithmetic. Absent other ways of stimulating the economy –
say, a lower currency, or an export and tourist boom sparked by recovery
in the rest of the euro zone – Europe’s cure for Greece always promised
pain without gain.

As we went to
press, Greece and the EU leadership appeared to be very close to an
agreement to keep the country from defaulting on its debts, to prevent
its banking system from collapsing, and to keep it from exiting the euro
zone.

To get such an agreement,
however, Greece’s leaders have had to capitulate. After months of
negotiations, and even after convincing the Greek people to vote No in a
snap referendum on Europe’s harsh demands for more austerity, Greek
Prime Minister Alexis Tsipras is now bending his knee and saying, Yes.
In return, his government is asking for what appears to be only modest
debt relief.

It is a stunning
climbdown. Mr. Tsipras’s Syriza party came to power aiming to convince
Europe that a change of economic course was needed not just for Greece,
but for all Europeans. Europe’s governing elite shrugged. If euro zone
finance ministers accept the Greek offer – not yet a certainty, but
likely – the result will not be the revolution Mr. Tsipras once hoped
for. For the third time in five years, Greece will be signing up for the
maintenance of the status quo.

So after the NO there is now a YES by the Greek parliament to the recent proposals of the Greek government to the Troika that are almost similar to what the Troika demanded. Sure, there are nuances, and the battle will go on. And the main thing for the future remains that Greeks are allowed to take their destiny into their own hands.

But how much manoeuvring space do the Greeks have? And would it be better for Greece to free itself from the euro straitjacket?

These and other questions will continue to be debated both within and outside Greek territory (how independent can a country be?).

By Lefteris Karagiannopoulos (Reuters) - The euphoria felt by many Greeks
at telling Europe their country was rejecting austerity for good
lasted less than five days.On Friday, the population woke up to discover Prime Minister
Alexis Tsipras had promised creditors a new bailout package with
austerity measures almost identical to those a majority of
Greeks had voted against in Sunday's referendum.A cartoon in the Kathimerini newspaper summed up the swift
change in the public mood: a group of Greeks joyously cheering
with a 'No' on Sunday next to a shot of the same group on
Tuesday collectively gasping 'Oh No!'.With the government now ready to implement a package similar
to one it had called a national vote to reject, 23-year-old
speech therapy student Marios Rozis reckoned the situation had
descended into farce."Everybody was happy on Sunday, it was a mature decision
against austerity. Today I feel the referendum happened for no
reason," he said as he sipped a coffee and worked away at a
laptop. "It doesn't make sense."His reaction of bitterness mixed with resignation and
exhaustion reflects the souring public mood in Greece, where the
jubilance of an overwhelming victory by the 'No' camp on Sunday
swiftly dissipated in the face of an expected economic collapse
before fading altogether as the new bailout plan emerged.Even before the crisis-driven concessions were unveiled,
fear had spread after Greek banks closed almost two weeks ago,
freezing the economy and creating long queues at cash machines
for withdrawals of a maximum of 60 euros a day while pensioners
without credit cards besieged bank entrances.QUICKSANDUnder the threat of a euro zone exit, Greece's government
submitted the new package of tax and pension reforms to
creditors late on Thursday in the hope of unlocking 53.5 billion
euros ($59 billion) in aid and the promise of potential debt
relief.Newspapers on Friday reacted with a similar sense of drama,
with the Left-wing Efimerida ton Syntakton headlining its front
page "Negotiating in quicksand" while the centre-right
Eleftheros Typos newspaper went on the attack, estimating the
'No' vote had raised the reforms bill by 4.5 billion euros in
five days.'I voted 'No'. And of course this new proposal doesn't
correspond to that 'No'," said Vassilis Sika, a 20-year-old
unemployed Greek in Athens' central square."I feel like a slave. They do what they want, and we can't
participate."The Communist-affiliated PAME group responded by calling for
rallies across Greece on Friday evening, saying: "Everyone take
to the streets! Battle now so that we can cancel the plans to
bankrupt the people. We say NO to a new barbaric bailout!"However, with banks running out of cash and the spectre of
economic collapse looming if no deal is reached, Tsipras appears
likely to win the support of a majority of deputies in
parliament for the new plan, even though some in his Syriza
party were critical.He now dominates the Greek political scene after a
referendum in which more than 61 percent of Greeks backed him by
taking his advice to reject the bailout terms.Acknowledging the failure of his campaign for the 'Yes'
camp, former Prime Minister Antonis Samaras resigned as leader
of the centre-right New Democracy party the night of the
referendum and the party has given its backing to Tsipras to
negotiate a new deal with creditors.For all the resentment of the new bailout plans, Thomas
Gerakis of the Marc polling group said Greeks were afraid of
being kicked out of the euro zone and aware that painful reforms
were the price for staying in."This issue (staying in Europe) needs to be resolved first -
the majority of Greek people want that, even with a bad deal or
a worse deal," Gerakis said.Only if and when it fell into place over the weekend, he
said, would the real recriminations and soul-searching begin.
(Additional reporting by Costas Pitas, writing by Deepa
Babington; editing by Philippa Fletcher)

Here is a google-based translation of the Italian version of the interview with Paul de Grauwe:

Paul De Grauwe: "Lenders want to push Greece into default. Now everything depends on the ECB"The
Belgian economist Paul De Grauwe, a professor at the London School of
Economics, has been one of the analysts that better than anyone else, in
2009, anticipated the crisis that was about to fall on the eurozone
when Greece revealed its true financial situation. Since then he has also been one of the most implacable critics of the way in which the crisis has been handled.The Eurogroup accuses Greece of being irrational in refusing to give in to its demands.It is pure propaganda. It
is obvious for years that austerity imposed on Greece has devastated
the country's economy and has not done anything to reduce the debt / GDP
ratio, but despite this the creditors insist that Greece must continue
on the same road. This is irrational, and when the Greek government refuses to do so, they accuse it of being irrational. It's the world upside down. Some of the reforms asked to Greece, such as the reform of the tax system, are sensible. But others, such as insisting on privatization in the middle of an economic depression, are absurd.The European negotiators complain that when the Greek government
proves willing to negotiate on a point then is not able to present
alternative proposals, in part because they do not have their
own experts and do not trust the experts of the [former] administration.It could be. It is a new government with little experience behind it, I can not deny it. But this is not a good reason to asphyxiate it. Yanis Varoufakis did not help much in this sense, I am afraid. But if I look at the contents of the rescue program, I understand the resistance of the Greek government. Following
the restructuring that was done, I believe that today the Greek debt is
sustainable, but only if you allow the country to return to growth. Today Greece has a liquidity problem, but the creditor nations are not going to give liquidity. They want to impose their conditions, which are very ideological. I suspect they want to tumble the government.Are they pushing Greece into default?It seems obvious. I would say that there are those who are trying to push the country out of the eurozone. The ECB's role will be crucial. Eventually
it will decide whether a Greek default inside the euro will lead to
an exit of the country from the eurozone, which is a terrifying prospect. It
remains to be seen whether the ECB will be willing to provide the necessary
liquidity to the Greek banking system so that it is not overwhelmed by a Greek default. If it does, Greece may refuse to pay, without this necessarily being a drama. The crux of the matter is totally political, the economy has nothing to do with it. It
is clear that a debt restructuring, much broader
than what has been done, should have been done because what happened is also the
responsibility of the creditor countries, of European banks that have
flooded Greece with liquidity. This restructuring did not happen and now the creditors want to impose
on Greece the political conditions that have no economic foundation.The eurozone is now more prepared for an eventual default than it was a few years ago?In short, yes. There
is no reason that a default or an exit of Greece from the euro should
have important implications for countries like Portugal, Ireland or
Spain, because today there are enough financial guarantees. The problem is in the long term. There will be more crises, another country will have difficulties ... and if it is clear that monetary union is not permanent, speculation will start.If a Greek default does not lead to its exit from the eurozone, as happens in
other monetary unions, would it not be a sign of maturity and strength of
the project?Everything depends on the ability of the eurozone to circumscribe what is happening in Greece. If
the State of California declares bankruptcy, it is manageable because
it will have an impact on the banking system of California, who enjoys
the guarantees of the federal system. Why in the US there is no risk of a domino effect, namely that a sovereign crisis from turning into a banking crisis. The question is whether this can be avoided in Greece or not. If you can not, Greece will have no choice but to exit from the eurozone. The
country can not afford to allow its banks to fail, because this would
drag down the rest of the economy, producing higher unemployment and
political instability. The
crux of the matter, therefore, is whether the ECB will be ready to
support the Greek banking system in case of default on the public debt
of the state.

I translate the last paragraph:
... the economist Charles Wyplosz considersthat it is forthe creditorsto make a gesturein favourof Greece.Contacted byL'Express, he considers that it is theEuropean strategythat led tothe current situation.For theFrench economist, whonow teachesin Switzerland after havingbeen an advisor tothe European Commission,the Unionwill bevery luckyif it manages toescape unscathed. This specialistof currency crises[Wyplosz] believes thatit isnow or never"to reduceGreece's debt".

I live in the Netherlands, I have the Dutch nationality, I live with pleasure in a country that has known moments in history characterised by an open mind to the surrounding world and its people as well as to the 'foreigners' living on Dutch soil -- be they immigrants, tourists or refugees.

But listening to what Dutch prime minister Rutte said yesterday about Greece made me angry and feel ashamed. He plainly and arrogantly warned the Greek government to not come to Brussels today with a "flutverhaal". If you are not Dutch it is hard to understand the arrogant and derogatory connotation of "flutverhaal". I do not know if "rubbish story" is an adequate translation.

How did the Dutch prime minister dare to talk in such denigrate terms about a government that has over the past five months made serious proposals to get Greece on a sound and viable economic path -- more serious than the unintelligent, dogmatic recipes the Dutch government as a key participant in negotiations with Greece has advocated.

And why did Dijsselbloem, sitting next to Rutte when the prime minister uttered this insulting nonsense, not correct his colleague? Or has he not listened to the sensible proposals of his Greek colleague in the Eurogroup meetings he has chaired over the past five months?

Sunday, July 5, 2015

Yanis Varoufakis stepped down as minister of finance of the Tsipras government and said the following about this on his blog:

"The referendum of 5th July will stay in history as a unique moment when a small European nation rose up against debt-bondage.
Like all struggles for democratic rights, so too this historic
rejection of the Eurogroup’s 25th June ultimatum comes with a large
price tag attached. It is, therefore, essential that the great capital
bestowed upon our government by the splendid NO vote be invested
immediately into a YES to a proper resolution – to an agreement that
involves debt restructuring, less austerity, redistribution in favour of
the needy, and real reforms.
Soon after the announcement of the referendum results, I was made
aware of a certain preference by some Eurogroup participants, and
assorted ‘partners’, for my… ‘absence’ from its meetings; an idea that
the Prime Minister judged to be potentially helpful to him in reaching
an agreement. For this reason I am leaving the Ministry of Finance
today.
I consider it my duty to help Alexis Tsipras exploit, as he sees fit,
the capital that the Greek people granted us through yesterday’s
referendum.
And I shall wear the creditors’ loathing with pride.
We of the Left know how to act collectively with no care for the
privileges of office. I shall support fully Prime Minister Tsipras, the
new Minister of Finance, and our government.
The superhuman effort to honour the brave people of Greece, and the
famous OXI (NO) that they granted to democrats the world over, is just
beginning."

At the same time, today, Monday, Yanis Varoufakis wrote an article on his blog about the NO vote of the Greeks:

On the 25th of January, dignity was restored to the people of Greece.
In the five months that intervened since then, we became the first
government that dared raise its voice, speaking on behalf of the people,
saying NO to the damaging irrationality of our extend-and-pretend
‘Bailout Program’.
We

spread the word that the Greek ‘bailouts’ were exercises whose
purpose was intentionally to transfer private losses onto the shoulders
of the weakest Greeks, before being transferred to other European
taxpayers

articulated, for the first time in the Eurogroup, an economic argument to which there was no credible response

put forward moderate, technically feasible proposals that would remove the need for further ‘bailouts’

Ending interminable, self-defeating, austerity and restructuring
Greece’s public debt were our two targets. But these two were also our
creditors’ targets. From the moment our election seemed likely, last
December, the powers-that-be started a bank run and planned, eventually,
to shut Greece’s banks down. Their purpose?

To humiliate our government by forcing us to succumb to stringent austerity, and

To drag us into an agreement that offers no firm commitment to a sensible, well-defined debt restructure.

The ultimatum of 25th June was the means by which these
aims would be achieved. The people of Greece today returned this
ultimatum to its senders; despite the fear mongering that the domestic
oligarchic media transmitted night and day into their homes.
Today’s referendum delivered a resounding call for a mutually
beneficial agreement between Greece and our European partners. We shall
respond to the Greek voters’ call with a positive approach to:

The IMF, which only recently released a helpful report confirming that Greek public debt was unsustainable

The ECB, the Governing Council of which, over the past week, refused to countenance some of the more aggressive voices within

The European Commission, whose leadership kept throwing bridges over the chasm separating Greece from some of our partners.

Our NO is a majestic, big YES to a democratic Europe.It is a NO to the dystopic vision of a Eurozone that functions like an iron cage for its peoples.It is a loud YES to the vision of a Eurozone offering the prospect of social justice with shared prosperity for all Europeans.

About Me

As a kid I liked numbers and the sound of strings. I considered studying engineering but chose social sciences because of my interest in people. I combine a theoretical interest with a practical, social approach which brought me to the sphere of policy research. I am interested in reducing the disparity between poor and rich, between the powerful and the less powerful.
In 1973 and 1982 I lived in Latin America. In the mid-1980s, I was able to create an international forum to discuss the functioning of the international monetary system and the debt crisis, the Forum on Debt and Development (FONDAD). I established it with the view that the debt crisis of the 1980s was a symptom of a malfunctioning, flawed global monetary and financial system.
I was one of the driving forces behind the creation of the European Network on Debt and Development that was established at the end of the 1980s to help put pressure on European policymakers.
In 1990, before the beginning of the Gulf War, I cofounded the Golfgroep, a discussion group about international politics comprising journalists, scientists, politicians and activists that meets regularly.
The website of FONDAD is www.fondad.org